By the Sandwichman. Originally published at Angry Bear
QUESTION. This is from Mr. White, Warren, Mich.
What is your stand on the 32-hour workweek?
Vice President NIXON: Well, the 32-hour workweek just isn’t a possibility at the present time. I made a speech back in the 1956 campaign when I indicated that as we went into the period of automation, that it was inevitable that the workweek was going to be reduced, that we could look forward to the time in America when we might have a 4-day week, but we can’t have it now. We can’t have it now for the reason that we find, that as far as automation is concerned, both because of the practices of business and labor, we do not have the efficiency yet developed to the point that reducing the workweek would not result in a reduction of production. The workweek can only be reduced at a time when reduction of the workweek will not reduce efficiency and will not reduce production.
It’s inevitable… but we can’t have it.
Dick Nixon’s turnaround on the issue of the four-day workweek was epic. His original prediction of a four-day week “in the not too distant future” came in a prepared speech, not in some unguarded moment of overheated campaign hyperbole. He even disclaimed that his “projections” were not “dreams or idle boasts” but were based on the continuation of President Eisenhower’s economic policies.
Following up on Nixon’s 1956 prediction, United Auto Workers president Walter Reuther responded with a telegram calling on the administration to outline a legislative program to achieve the shorter workweek. Nixon sent a telegram in reply and President Eisenhower endorsed Nixon’s reply in a press conference on September 28.
Nixon’s reply was that “mere artificial legislation” would not accomplish a four-day workweek. What was necessary was “dedicated joint efforts of labor, management, government and research.” For his part, Eisenhower “saw nothing wrong with” Nixon’s answer, which he thought also represented his own view that it would be “wonderful” to have more leisure time, but that “no man can say it is going to come about because I say so.” A month after his first comment, Nixon reaffirmed his expectation of a shorter workweek, based on partnership between government, business and labor.
The adamant wording of Nixon’s 1960 dismissal of the idea takes on added resonance in the context of Eisenhower’s earlier caveat that “no man can say it is going to come about because I say so.” Four years later, it “just isn’t a possibility… we can’t have it now. We can’t have it now… [because I say so].”
This wouldn’t be the first time that self-contradiction has appeared in the rhetoric of opposition to shorter work time. The Sandwichman has amassed the world’s largest collection of lame excuses offered by opponents. I assembled 21 of them and sorted them into eight categories having to do with productivity, new consumer wants, unsatisfied needs, labor costs, government policy, self-adjusting markets, history and inevitability, and the devious motives of proponents.
To be kind, the rationales are opportunistic. Mostly, they are jejune partial equilibrium statements invoked as if they were eternal verities. More bluntly, they are mendacious. Every single reason given for not shortening the hours of work is complemented by a contradictory reason for not shortening the hours of work. Damned if you do and damned if you don’t.
Regard the vagaries: the hours of work cannot be reduced because that would lower productivity; but if they were reduced, it wouldn’t lower unemployment because the shorter hours would be just as productive as the longer hours. The hours of work don’t have to be reduced because new consumer demands will create more jobs; but they cannot be reduced because there are so many unmet needs of those living in poverty. The economy will adjust automatically to reabsorb workers displaced by automation; and there is no need for government intervention because government policy will lubricate the self-adjustment process. History gives proof that future reductions are inevitable because in the past they always have occurred; but history shows that the economy has always generated sufficient jobs, implicitly without any need for reducing the hours of work. Contemplate the inconsistencies:
- The workweek can only be reduced at a time when reduction of the workweek will not reduce efficiency and will not reduce production.
- It would throttle at the source the gains in productivity made possible by technological progress, thus shutting off the abundance through which the eventual abolition of poverty must come. Its end result would be fewer jobs, not more.
- …the illusion [job creation] arises, first, from simply not observing or apparently caring to observe the important alteration which the introduction of shorter hours itself exerts on the productive capacity of the workpeople…
- The natural effect of shortening the hours of work to eight a day, therefore, is not in the least to diminish production; it is really the exception when that event supervenes, and as for the most part the same staff does about the same work as before, there is nothing to create any change in the situation of the unemployed…
New Consumer Wants
- This view ignores the possibilities for new consumer wants and new industries in stimulating growth and creating more jobs.
- In fact, if people worked fewer hours, demand would drop, and so fewer working hours would be on offer.
- Over the long run, technological improvements create new products and services, raise national income, and increase demand for labor throughout the economy.
- What the drive to shorten the work week ignores is that the country cannot afford it, either in terms of production costs or of unsatisfied national and world needs.
- …by working less, we will throw away the opportunity automation and other improvements in technology afford to banish poverty at home or abroad.
- This view ignores the possibility that the demand for labour may depend on the relation between wage rates and the value of work to employers.
- However, if restrictions on hours make labor less attractive to employers, they will substitute to other inputs, and there will also be a scale effect reducing use of all inputs.
- The unemployed are apparently to obtain employment from capital which only comes into being as the result of their employment; they are to provide a handle to their axe from the tree they hew with it…
- If proper monetary, fiscal, and pricing policies are being vigorously promulgated, we need not resign ourselves to mass unemployment.
- Though technological unemployment can’t be shrugged off lightly, its optimal solution lies in combining expansionary macroeconomic programs (fiscal and monetary policies) with retraining policies that create adequate job opportunities and new skills, rather than restrictions on production.
- So what will happen if we use shorter hours to cut unemployment? Inflation will rise more than it would otherwise. Two responses are then possible. One could say, ‘Bravo We have cut unemployment and we are willing to accept the rising inflation.” But if this is the reaction, it would obviously have been better to cut unemployment by expanding output than by simply redistributing a given amount of work over more people. So there is no case for shorter working hours along that route. Along the alternative route the outlook is even bleaker. In this scenario the government sees inflation rising, decides it is unacceptable, and allows unemployment to rise back to its original level (so as to control inflation). The net result of shorter working hours is then no reduction in unemployment, but a reduction in output.
- …a permanent and a more or less general reduction in hours will cut down the amount of technological unemployment. … The transition will without any doubt lessen the amount of unemployment for the time being. But when once the new level is reached and the necessary adjustments in industry have been made, there is no reason for believing that the volume of unemployment will continue to be less than it had been.
- Trade is not hemmed in by great walls, beyond which it cannot go. By bringing our goods cheaper and better to market, we open new markets, we get new customers, we encrease the quantity of labour necessary to supply these, and thus we are encouraged to push on, in hope of still new advantages. A cheap market will always be full of customers.
History and Inevitability
- By 1980, the thirty-hour work-week should be widely established and some progress made toward the twenty-five-hour week.
- History provides little support for this gloomy view… that the economy can generate only a fixed amount of work.
Devious Motives of Advocates
- Their aim and object is, in every case which we have been enabled to investigate, to stint the action of superior physical strength, moral industry, or intelligent skill; to depress the best workman in order to protect the inferior workman from competition…
- …motives very different from these [proclaimed reasons] actuate many who most earnestly appeal to the State to impose a legal limit upon the days work.
Implicit in much of this pretentious double talk is the notion that consumer demand is utterly independent of wages, so “the economy” can become more prosperous by lowering wages. Apparently, economists are still so enamored of Say’s Law that they haven’t paused to consider the implications of Say’s other law — that “misery is the inseparable companion of luxury.”
But there is one perspective from which coherence can be divined from all this self-serving ad hocery. Unwittingly, the opponents of work time reduction adopt a theory of surplus value very much like that elaborated by Karl Marx in Capital. It is not a matter of whether such a theory adequately describes the determination of value or of prices. Right or wrong, the theory guides opponents’ attitude toward the reduction of working time. They are accidental Marxists!
Replace “collective capital” with “the economy” and “collective labor” with “fallacy adherents” in the following declaration and we have a fine slogan for The Economist’s unrelenting campaign against the lump of labor fallacy.”Hence it is that in the history of capitalist production, the determination of what is a working day, presents itself as the result of a struggle, a struggle between collective capital, i.e., the class of capitalists and collective labor, i.e., the working class.”
Marx summarized the relationship between the production of absolute surplus value and of relative surplus value in the following passage:
Assuming that labour-power is paid for at its value, we are confronted by this alternative: given the productiveness of labour and its normal intensity, the rate of surplus-value can be raised only by the actual prolongation of the working-day; on the other hand, given the length of the working-day, that rise can be effected only by a change in the relative magnitudes of the components of the working-day, viz., necessary labour and surplus-labour; a change which, if the wages are not to fall below the value of labour-power, presupposes a change either in the productiveness or in the intensity of the labour.
Of course labor is not always “paid for at its value” and neither the length of the working-day nor the productiveness of labour are givens. There is a continuous tension between efforts to lengthen or shorten the working day and to increase or relax the productiveness and/or intensity of work. Although analytically separable, these two processes are actually always simultaneously in play.
Thus, in the capitalist form of society in which exchange values predominate, rather than use values, there arises from the nature of production itself a “boundless thirst for surplus-labour.” To emphasize: this “boundless thirst” does not arise from the needs or wants for goods and services of consumers but from the compounded compulsion of the capital accumulation process.
From the standpoint of this boundless thirst for surplus-labor, any attempt to limit the length of the working day or to impede the intensification of work, or hold onto part of the proceeds from it, must indeed appear as a irksome fixation on a “fixed amount of work,” especially if “work” is understood to refer precisely to that portion of the working day that is expropriated by capital.
Let us now revisit Nixon’s 1960 repudiation of the four-day workweek with a slight amendment.
The workweek can only be reduced at a time when reduction of the workweek will not impede capital’s boundless thirst for surplus-labor.
Until the summer of 1952, the New York Stock Exchange had a regular Saturday morning session. Stocks traded six days a week. Later in the Fifties, my dad and other breadwinners in the neighborhood headed off to work on Saturday morning, just as they did Monday-Friday.
By the late 1960s, Saturday morning as a regular workday was fading. Maybe John Kennedy caused this by not wearing a hat anymore, thus liberating men from weekend toil. ;-)
But — deja vu! — in the late 1980s the six-day work week, including Saturday morning, was still going strong in Taiwan. It definitely puts a crimp on weekend recreation.
Apparently longer work weeks coincide with faster development and GDP growth. As societies get richer, more leisure time is traded off for slower growth. In France, this trend has been pushed to a 35-hour work week and near-zero growth.
Would a universal 32-hour work week produce negative growth in both GDP and population? Probably. Even the task of reproduction provokes ennui, with all that leisure time and not much to do.
Do you really think France’s economic malaise can be explained by its 35 hour work week?
Japan has the second-longest workweek in the world and they’ve had two and a half decades of almost zero growth.
Most people are very inefficient with their time while working and could get the same amount of work done in much less time. This would free up more leisure time, which can be used for a)a second job, b)more consumption (on leisure activities like going to the movies), or c)enjoying life.
This assumes that merely shortening the work week would encourage workers to address their inefficiencies, and not merely apply them to fewer hours.
I do know people who voluntarily work shorter weeks — mostly women caring for children — who are massively efficient and really do perform “8 hours of work” in 6 hours or less. But I think it’s fallacious to expect this to happen across the board, especially once a shorter week becomes the norm. These people are more efficient because they need to be to compete with others working a longer week; or perhaps the rest of us are inefficient because it’s more comfortable and we aren’t held accountable for this.
But what you offer is an intriguing way to introduce a shorter work week: simply pay for a level of output, rather than paying for hours worked. Of course this means arranging a measurement of work output, which in many careers is actually quite difficult.
Haygood is our resident Conservative barnacle. He opines from time to time with gems from Hayek and Ayn Rand and other delectable balderdash. Remember to ignore his burblings the next time you see it. Some day we may be able to explain why conservatives like to go to well established and intelligent websites/blogs and start spouting crony capitalist claptrap despite knowing that 100% of the readership know how snake oil tastes and smells.
A steady-state GDP is what we want. We are using resources faster than the planet can clean up after us. We need negative growth in population and a sustainable economy.
Keynes seems to have missed something – family labor hours have increased dramatically since Nixon’s time. We all want more, and will invest our available hours to get it. But the net result is our extra work has not yielded more benefits to families.
There may indeed be a boundless thirst for surplus-labor, but I don’t see an explanation for why this should be. Is there an economic theory behind this?
As far as I can tell, if our bills — what we pay for rent, utilities, schooling, food, transport, etc. — keep going up, then we need more just to stay in the same place. Since bills keep raising and pay packets don’t, this means we need to work longer hours just to stay current.
Saying “we want more” comes across as blaming the victim. Family labor hours have increased dramatically since Nixon’s time, but I don’t think that’s because we all want more. Many just want to keep what they have.
Credit supply is elastic as fiat costs nothing to create. The more we work the more land costs rise (the main cost for all workers). All surplus flows to land and the banks provide the fiat.
We need land value tax. If people want to work more and add more value let them. Right now collectively there is no point in working longer / smarter because yes we are left in the same place.
Organized capital is in a much stronger negotiating position than disorganized productive labor. Globalization has created organized capital with access to cheap labor, resulting in the offshoring of many of the productive manufacturing jobs that built up the middle class. The service economy jobs that replaced the lost manufacturing jobs do not create nearly as much value as do the lost manufacturing jobs. The laws of supply and demand greatly favor organized capital in this current state. Hence the distribution of income tilts heavily toward capital. So great is their power that the economics profession does not address the real underlying problem — the dysfunctional political and monetary systems that have resulted in the immense concentration of wealth into relatively few hands. You need to go back in time 200+ years to the rentiers problem of classical economics for some answers. Current mainstream economic theory steers us away from this and sends us off on a wild goose chase, so the power of organized capital to distort the economy in their favor goes unchallenged. Today’s economy is not a free market economy, but a captured one. It won’t be free until the power of organized capital is broken. Michael Hudson is a highly recommended read. Thorstein Veblen also.
Yes, the power of capital is the issue. Under capitalism, the business owner sets the workweek, and has no reason to shorten it, even if her workers preferred the tradeoff in increased leisure vs. lower income for themselves. The owner by acceding to their wishes would also lower her profits, but gain…nothing.
One might argue that the owner could hire more workers and give them shorter individual workweeks, maintaining profits. This kind of “work sharing” occurs more in Europe. A main impediment in the U.S. is employer health insurance, normally offered only to full-timers–that is a fixed cost per worker, so the owner resists offering it to part-timers, and full-timers don’t want to lose insurance by becoming part-time. Nationalized health insurance (like Europe) would fix this… :) In fact, Obamacare has already led to a substantial increase in voluntary part-time work, according to Dean Baker.
But owners still don’t like leisure time per se, because workers may use it to…educate themselves and organize actively against capitalism itself. Exhausted workers who collapse at night watching reality tv are not going to change the system. The ultimate solution is a socialist cooperative economy, where each workplace’s decisions on the workweek are made at the by the worker-owners themselves, democratically. They can then decide how much the trade-off in leisure time is worth, and workweeks would steadily shorten to a more natural (sane) range.
Note that productivity has more than doubled since 1970, so we could now have that (average) 1970 standard of living while working an average of 20 hours per week. Or at the level of the 1990’s while working 30 hours per week. I was sentient in 1970, and average (mean, not median) material living standards in 1970 America were…just fine! (Of course, there was still massive inequality, but socialism would average that out…)
Now all we have to do is get there from here… :)
The “business owner” is not organized capital. There is a huge difference between a business that is entrepreneur-owned and one that is owned and or controlled by organized capital. The entrepreneurial business owner and his workers may be adversarial toward each other in certain respects, but at the end of the day they all had to set aside their differences and pull together in order to succeed. The success of the entrepreneurial business owner was based on cooperation — not only with his workers, but with his customers, suppliers, shareholders, bankers, and to a certain extent, the community in which the business operated.
The business that is owned and controlled by organized capital has an entirely different business model. Not long ago I posted a rebuttal to an author’s article on Mises.org lauding Jeff Bezos and Amazon. Austrian economics views every business through the lens of the entrepreneurial-owned business, and as such erroneously concludes that the $75 billion in wealth Jeff Bezos has accumulated is a just reward for the success of Amazon. So I asked the following question: Given that Amazon’s audited financial statements show that Amazon’s accumulated earnings over its entire 22 year existence approximate $-0-, where did this $75 billion in wealth come from? The answer is it came from the stock price gains in Amazon’s stock. But if the company is not making any profit, what is fueling the stock price gains?
The answer is that Amazon is not an entrepreneurial-owned business whose ultimate success depends on mutual cooperation of all the key stakeholders of the business. It is a business controlled by organized capital that is being built to dominate every single business relationship they enter into. And therefore the value of its stock price is based entirely on its potential to wipe out its competitors and dominate the entire marketplace…workers, customers, suppliers, lenders, governments, and every community within its reach.
Not too long ago there was a series of excellent articles on Uber on this website. Same story. The dominance that Amazon is achieving through its control of distribution, is the same sort of dominance Uber is trying to achieve through its control of transportation.
The length of the work week, i.e. dominance of the workplace, is but one of the issues at stake here.
“Keynes seems to have missed something – family labor hours have increased dramatically since Nixon’s time. We all want more, and will invest our available hours to get it. But the net result is our extra work has not yielded more benefits to families.”
It’s so hard to know where to start with the confusion in this paragraph. The reversal of cause and effect? The implied claim that the need for increased household work hours is the result of personal choice? I’ll just ask: What the hell does Keynes have to do with any of this? What did he write or say that made him supposedly “miss” this?
In 1930, British economist John Keynes wrote an essay called “Economic Possibilities for Our Grandchildren.” In the essay, he made the now-famous assertion that his grandchildren’s generation (meaning people in the workforce today) would only work 15 hours a week. I thought NC’s readers would have been aware of this.
I posted to stimulate discussion and I’m glad I did – there were some very interesting posts in response.
I’ve known plenty of people for whom working longer hours was a very deliberate personal choice – for the benefits of “Living Large”. It’s not clear to me whether the direction of causality is from prices to hours or from hours to prices. Perhaps it is a circular loop that does indeed use up all available labor over time.
If you have any insight into the “boundless thirst for surplus-labor”, I’d be interested in hearing it.
I’d say it wasn’t a would, though. It was a could. He was presenting the possibility that compound growth – productivity – would allow us to solve the economic problem. The basic necessities would no longer be scarce.
And it’s true. Only about 10-15 hours a week goes toward the general economic needs of society, depending on exactly how you define that. The rest is additional production for the finer things in life, waste, and plunder, with those latter two, unfortunately, dominating the activity.
Keynes accurately in my view predicted that many people would push back against the idea of promoting leisure. Indeed, today, there are passionate advocates of what we affectionately call moar on both the left and the right. Some liberals seem downright terrified of reducing the dependency of the unwashed masses on unfulfilling, environmentally destructive crap jobs. That’s not Keynes getting it wrong. That is comfortable liberals misappropriating Keynes.
The dual earner family did “yield more benefits to families” during the 50’s and 60’s. It enabled my family to go from 1 to 3 cars in the drive, longer vacations, a stereo, color TV, and golf club memberships. The extra income moved my family to the upper end of the middle class. Soon dual-earner families became the norm as everyone doing it lived a bit better than before.
My speculation is that increasingly easy credit undermined continued mass upward mobility. By 1980, nearly everyone was living above their means thanks to fixed house and car debt. The situation went unnoticed, in part, because until then, inflation kept lowering the cost of fixed debt. Then two things happened. First, banks shifted to variable interest rates to insulate their profits from inflation. Second, credit card use had become ubiquitous – allowing people to use unsecured debt for emergent needs.
Today, the average US outstanding credit card debt is nearly 1/3 of the average annual income ($16K). Thus, if one family member cannot work, the odds are that they cannot meet their fixed debt obligations without cutbacks. If the cost of any fixed expenses increases, that family’s standard of living must drop to accommodate it.
But instead of cutting back, research has shown that families were more likely to raid their retirement savings and home equity – expecting a rebound that generally kept occurring right up until 2008. By that time, there was no more equity left to raid, credit card debt was maxed out, and the Great Recession forced families to cut back via repossession.
Today, even with near full employment, the work landscape has changed. People in other countries would do for 1/3 of what companies were paying US workers. By the turn of the 21st century, to compete with cheap overseas labor, US companies massively robotized. This depressed US wages for people with limited skills even with near full employment. Alas, today people with limited skills merely do tasks for which a robot is yet too costly or not yet available.
Thus, extra work is unlikely to change anything for a great many families, who for several decades, got used to life in the Great US Middle Class. The so-called “gig economy” will continue to shrink the middle class until Trump, or the next president, figures something out.
Efficiency is achieved if we all do the same things, so if we shorten the workweek, it has to work for most of us all at once. But the transition could be partially buffered by extending the work day to 9 hours.
But given asymmetric international trade, we have extended this equality problem to the entire labor world … we can’t shorten hours unless the Europeans and the Chinese also do it.
Maybe it is explained by Marx’s labour theory of value and the proposition that profit is unpaid labour. As I understand it, and I am not an economist, Marx argued that competition lead to a lowering of prices by capitalists attempting to reduce the necessary labour time to produce a product, this could be by intensification of labour but also by increased use of technology to increase the productivity of labour but this in turn leads to a falling rate of profit. Isn’t this the underlying problem with capitalism. Even now? As the rate of profit falls financial speculation increases in a desperate attempt to escape this law?
The underlying problem with capitalism is that capital demands all the profit. The financial speculation problem is just one of the methods capital uses to get that profit. They can’t get it all directly by paying only subsistence wages, so they resort to financial engineering to take away even more from the masses. With the immense power that organized capital has over disorganized labor, capitalism is now a system ruled by the human vice of greed.
Why do we need to keep productivity at its current level? Or even increase it?
The ongoing crapification of everything suggests that productivity is already too high. Older items were built to last — and, indeed, many items built in the fifties and sixties still work just fine. Newer items are all built to wear out very quickly, or the technology is deliberately changed to make the older items no longer viable — I’m thinking of things like computers and mobile phones here — so that every few years they need to replaced with a newer model.
Surely this suggests that productivity is too high, since companies need to create this sort of artificial demand to absorb the output of the current level of productivity. If things were once more built to have a longer life span, then demand for replacement stock would fall, but that wouldn’t be due to a lack of productivity.
So, why the fetishization of productivity?
The only thing that occurs to me is competition. If one company accepts the current level of productivity because it doesn’t need to produce any more goods, then some other company that does increase its productivity could use its extra production to take the first company’s market share and drive it out of business. It’s like some drinking game where everyone is dying of alcohol poisoning, but can’t stop taking shots because that means someone else will “win”.
Or is there some other explanation?
I would say that crapification means that productivity is being miscalculated.
Not sure how you can miscalculate productivity.
Take white goods (washing machines, refrigerators, and the like). The metal sheeting used to be dipped in white paint, so the paint would seep into every nook and cranny, completely covering the sheet. Now the metal sheeting is spray painted, which means nooks and crannies remain unpainted and so open to the air and vulnerable to rust.
The spray painting is faster, so you can do more sheets in a given unit of time. That’s productivity.
The unpainted nooks and crannies are open to rust, so the metal sheets of the unit start to oxidize within a few years. That’s crapification.
The result is that because of the crapification, after a few years you need to buy a unit to replace the rusted out one. Because of the increased productivity, the manufacturers have no difficulty supplying you since they are producing more than the market needs.
But, whether dealing with the original long-lasting units or the new crappy ones, productivity is calculated in number of units produced per unit of time. The calculation remains the same.
If you are not including externalities, then your productivity measure is wrong.
For example, Trucking industry depends on highway system paid by everybody else.
Trucking industry can make itself “productive” but at the national level, you can expect crapification over time thanks to the increased “productivity” of the trucking industry because of the omission of these externalities.
More succinctly… optimizing the parts does not necessarily optimize the whole.
And over the last few decades we have put specialists on a pedestal while making no space for generalists.
I remember a time when management were the generalists. High tech firms were run by engineers promoted from within. They were made into generalists by rotating them though the departments.
Now management are specialists in management (MBA) with no general knowledge.
As far as I’m aware, the measure of productivity I’m referring to is the one used in the op and the one used by economists, politicians, journalists, and others when they talk about the subject. That’s the type of productivity they insist must be maintained and increased.
If you wish to devise a different way of measuring productivity and argue that it’s better and should be used instead, that’s valid, but is a different argument.
Productivity measures usually use monetary values of inputs and outputs.
Most productivity measures I see use monetary values and not only time and units. As soon as monetary values are used, the calculation is invalidated by the fact that monetary values exclude externalities.
Money is not a valid unit of measure in this case. It’s too easy to game.
If you can force suppliers to sell the inputs to you at a lower price and/or compel customers to buy the finished output at a higher price, then you increase productivity without actually doing anything different. The entire increase is illusionary — and I don’t mean in terms of externalities or crapification, I mean literally nothing has changed; the same amount of inputs still produce the same amount of outputs, only the prices have changed.
Perhaps that’s the explanation. If you count the cost of labor as one of the inputs and you start paying people less, then the cost of your inputs goes down relative to the price of your outputs and you’ve increased your “productivity”. Easy-peasy.
So, ignoring money and sticking to just units and time, how does ignoring externalities lead to crapification? I can see that it makes the world crappier, but I don’t see why the items themselves should be getting worse over time. Modern washing machines should be as good as those made in the past, but they demonstrably aren’t. I don’t see how the deterioration of the highway system and increased pollution affects the quality of the washing machines.
It’s about how much energy and resources are needed to produce the washing machine vs. how many loads it can take.
You keep changing the subject.
First it’s externalities, then it’s productivity-is-measured-in-money, now it’s energy and resources.
This one doesn’t work either. If you use one ton of steel to make washing machines, you can’t get more than one ton of steel in the final washing machines. You can get less due to wastage, but the maximum you can get in the final product is one ton of steel. It’s physically impossible to get more.
Same with energy. There is an irreducible minimum of energy needed to shape the steel. You can use more energy than that — wastage again — but you can’t reduce the energy below that.
We’re dealing with basic conservation laws here.
This means there’s an absolute limit to increases in productivity. Once all the wastage has been eliminated, it can’t go any higher. Yet the received wisdom and underlying assumption in economics, politics, journalism, etc. is that productivity can be increased indefinitely. So it can’t be measuring the resources used to make the item relative to the resources contained in the final item, nor the amount of energy required, because both can only approach an ideal, probably asymptotically, not keep improving indefinitely. Since one of the features of productivity is that it can keep improving indefinitely, it must be measuring something else. Otherwise the entire concept borders on the incoherent.
The number of loads the washing machine can take is not part of the measurement. Externalities are not part of the measurement. What’s being measured is number of units produced per unit of labor time. That’s the only thing that makes sense, since that’s the only thing that can increase based on technology and how labor is organized.
For the good of society, companies should be making washing machines that take up as little resources and energy as possible per load. But that is definitely not what we are measuring.
This means that systemically, we are allocating our energy and resources inefficiently throughout the system. Therefore, isn’t it logical to expect generalized crapification when you are not measuring what is actually important for your population and you are wasting your most important assets?
Great exchange. Shows how talking about the economy continually brings up new discusions in differrent directions. Obviously leaving out the operational mechanics of money; ( not taking into account the governments role of creating permanent fiat money through deficit spending ,as well as understanding the reality that banks dont actually loan out depositors savings and are not dependent on reserves to loan it out, anotherwords not just innocent intermediaries between savers and investors, and that private debt levels are more important in measuring or modeling macro economic variables); makes it extremely difficult to actually measure productivity via GDP in dollars. Profit is good. Surplus value measured in dollars amassed is the ultimate goal, irrespective that socially those points accrued might not be the best mediating measure of overall value for that group sharing those exchange mechanisms . I wonder if more people understood their monetary systems dynamics, would their politics change. The reality supports more of a democratic socialism, while the fantasy encourages a libertarian thought. People must work longer, harder, for less because everything is scarcer. Technology creates more opportunities to sell yourself into mindless redundant serfdom, rather than the majority enjoying better experiences of existing. If being productive is synonomous with passion and enjoyment in some action, without causing sufferring towards others, then isnt that a quality of life issue more so than productivity. In that future world money may actually measure something worth measuring.
Just goes to show you what I’ve always thought:
Work is babysitting for adults.
When the Montreal Canadians started to play in 1909, there were 2 million Quebeckers. Now there is still just one team with 8 million. Why don’t we have at least 4 teams?
It’s like this in EVERY sector yet people can’t figure out why the one percent get everything and crumbs for everyone else.
We live in a world of consolidation where the winner takes all and the others get to work for 10 buck an hour. And the acceleration can be charted like a hockey stick. The next 15% will get squeezed over the next decade or two…
If we want to fix the problem, we as individuals have to stop putting these stars born out of consolidation on a pedestal. That means stop watching NFL, NBA, NHL, etc.
If you are following or funding any of these instead of promoting your comnunity artists or sports teams you are part of the problem.
The enthusiasm generated by European-style work hours reductions, guaranteed vacations and other benefits demonstrates the dirty little secret at the heart of our current economic system: most people work because they have to, not because they want to. I suspect that most folks would be delighted to be able to do whatever they wanted. Instead, there is the endless litany proclaiming that everyone just love love loves to work, wouldn’t want it any other way, it’s just how decent people are. The vast majority of jobs are boring and repetitive; don’t make it worse by pretending that such work is some noble human life pursuit.
Perhaps men and women don’t want to stop working because they need the money to move into into neighborhoods with better schools, better environments, for their children. You can see more of this perspective from Steve Sailer at Unz.com
kids they then don’t have any time to spend with. But at least if everything goes right they will get into a top tier college or something. What a world.
As Terence McKenna asserts, “culture is not your friend.” The glorification of work is a cultural construct perpetuated by a sociopathic and narcissistic elite. As Bob Black points out in The Abolition of Work, everyone in charge says work is ennobling and necessary. They just think you should do it. Or die.
A nugget from the 1920’s
Laborers knowing that science and invention
have increased enormously the
power of labor, cannot understand why
they do not receive more of the increased
product, and accuse capital of withholding it.
The employer, finding it increasingly difficult
to make both ends meet,
accuses labor of shirking. Thus suspicion
is aroused, distrust follows, and soon
both are angry and struggling for mastery.
It is not the man who gives employment
to labor that does harm. The mischief
comes from the man who does not
give employment. Every factory, every
store, every building, every bit of wealth
in any shape requires labor in its creation.
The more wealth created the more
labor employed, the higher wages and
the lower prices.
But while some men employ labor and
produce wealth, others speculate in the
lands and resources required for production,
and without employing labor or
producing wealth they secure a large
part of the wealth others produce. What
they get without producing, labor and
capital produce without getting. That
is why labor and capital quarrel. But
the quarrel should not be between labor
and capital, but between the non-producing
speculator on the one hand and
labor and capital on the other.
Says former Federal Reserve Chairman Alan Greenspan said that “if the workers are more insecure, that’s very healthy for the society” because “they’ll serve the masters gladly and passively.”
Who ever heard of adding another chair when the music stops?
Great comedy. “The compounded compulsion of the capitalist accumulation process.” Hey, it’s just perpetuating itself. No doubt the Nixon double-speak comes from being caught between Eisenhower’s idealism and the MIC. Here’s one translation to the above: We were into the Cold War up to our eyeballs. We had big plans. And the dollar was being trashed, France was demanding gold, not dollars. We were already locked into deficit spending and inflation lurked around every corner… cue the scary music. A 32 hour workweek would have set off a tad of deflation. Since there would have still been ample production but less money to consume it. The whole grand theory of consumerism was raging at the time, no doubt because it was so useful for our purposes. Somebody came up with the 6% solution of unemployment to keep the dollar strong and in balance (and if a 32 hr workweek had already cancelled excess employment how would they manage only a 6% solution?). The strength of the dollar was the biggest problem. In order to prosecute the Cold War and keep the dollar strong we really were printing money night and day and to offset that we needed a booming economy – even though it was total hubris, but never mind that part.
Waiting in line is the only socially acceptable form of doing nothing.
Watching television is doing more than nothing? Since when?
sitting in traffic is kind of doing nothing, but then it’s what we need to do so we can “do something” (that is work), so therefore since it is going to work and back and work is the great “doing something” the hours spent in traffic counts as doing something by proxy.
For what it’s worth.
The work week in the entertainment industry starts at 60 hours with 12-hour days. 14 and 16 hours are not unusual. The Studios continually push to shorten the amount of prep time forcing longer days which results in staggering crew in double and triple shifts with sixth and seventh days. Without the overtime, it would be almost impossible to afford to raise a family in New York, Los Angeles and now increasingly Atlanta.
The only way a shorter week will be achieved in this particular indutry is if rates ncrease, the days shorten, and Production is extended. Unfortunately, the exact opposite is happening as entertainment increasingly moves away from features and traditional 22-episode television to the limited series, with story arcs of anywhere from 4 to 10 episodes.
Feature films are rapidly reducing to two extremes of low budget under $15 million or its inverse the over $100 million blockbuster. There are statistics out there showing the majority released in the United States are on the low end.
This is just one industry. A shorter work week is not in this industry’s interest without rates going up. And I just don’t see Studios allowing that to ever happen. They want more hours, less pay.
but it’s criminal, not allowing people to have a life, to spend time with their families and lovers and friends and loved ones during their very limited time on earth nor to spend time on hobbies and exploration and … really just being a traveler for a limited time on spaceship earth experiencing the anomaly that is sentient life itself.
And all that for an industry NOONE ACTUALLY NEEDS (no it’s not a hospital being staffed 24/7 for 2am heart attacks etc., it’s not working extra hours to bring in the food when it’s ripe). To rob human beings of the hours of their life (and 12-16 of them a day), for that is the height of immorality. And there is no conceivable plausible argument that hollywood product, is better for the society in some way than whatever these people would have done with some spare time (even if it’s just spending time with fellow humans and nothing more – that is of social benefit, although with spare time might have joined a community theater etc.).
People have always entertained themselves of course, art and storytelling and all that are very old. But Hollywood and it’s exploitative 19th century capitalism can go die. And the practical solution: pass and enforce overtime laws for everyone (no exceptions at all). And if that means some movie doesn’t get made, too bad, so sad. Workers have a right to a life.
BTW noone else in L.A. or elsewhere (though finance has to be the big player in NY) really wants their cost of living raised so that they have to compete with the sweatshop hours in dark satanic Hollywood studios either. It’s a @#$# negative externality for everyone else, is what that is.
We need a culture cleanse. Have for a long time. Most of today’s problems were known or predicted to occur when I was in high school in the late 60’s early 70’s. Overpopulation, pollution, highly processed food, predatory banking, military adventurism, govt for the benefit of the rich and powerful, etc.
Withdrawing from the culture and ceasing to support its tentacles works for many of us going on decades.
Replace your self only, refuse to use chemicals, drive less, have a garden, cook for your self with fresh ingredients, join a credit union, preach peace not war daily, learn to fix things and use tools, help each other instead of using govt services.
Trying to get the masses to reject the culture so heavily promoted thru advertising and peer pressure has always been a losing battle esp in the face of immigration and population growth. Likewise trying to stop the economic predators from strip mining the planet.
No solutions offered on a macro level. On a micro level the task is surprisingly straight forward and success is highly probable. Start! Less “work” will surely follow and a richer being will reside in your future.
You can’t have all these people working less!!!
They’d be less tired, less anxious, happier, more content, and all. They’d vote more, they’d think more, they’d demonstrate more, they’d write their politicians, they’d party more and write more poetry. Why, they may even wake up and see the mess the one percent and their politicians have created!
We can’t have any of that!! As a matter of fact we want them working more, not less, so they can think only to the next bill they have to pay.
What’s the matter with you.
Indeed, there’s a two-word answer to the question of why we can’t have better distribution of work: labor discipline. The breakdown of labor discipline (represented by the high incidence of wildcat strikes in the late 60’s and early ’70’s in the US and Europe) was a scary thing for the Overclass and its attendants, and they’ve worked productively to see it doesn’t recur.
Fear, in ever-greater amounts, is needed to compel participation in labor markets and jobs that, for most people, are awful. Capitalism is a stern master, and it’s deviants and miscreants, and sometimes even its devout believers, must frequently be sacrificed, so that the rest will obey.
Thanks, Michael. I forgot the 1960s.
Didn’t we get Nixon and later Regan after that? Must be a coincidence.
A laymen explanation was provided by David Graeber some time ago. I apologize for not providing the original link at Strike. Seems their website is down.
For US background on this topic: Work Without End
Abandoning Shorter Hours for the Right to Work
As the IWW was saying 100 years ago:
4 hour work day
4 day work week
And no wage cuts – make prosperity for all
I don’t understand the “in the weeds” details about issues of work, automation, jobs, and income as discussed at NC, so I don’t usually comment, but now and then I try at least to understand the assumed context.
So probably this is OT, but looking around my mostly middle class world, there’s tons of work that isn’t being done. I can’t imagine how much more isn’t being done in more distressed areas.
Chinese workers and robots aren’t going to get the work done. Nor will giving people a living wage for a 20-hr work week flipping burgers. I don’t know if there are energy resources to do it, or if it would “create” enough jobs to make up for lost manufacturing and automation, or eliminate workplace danger, drudgery, or long hours.
However, if the work were being done, there would be lots of jobs, at all levels of education and skill. There would be many motivations for people to work (traditional work ethic; intellectual, creative, or physical challenge; desire to serve or be part of something…). Distributing the results of the work as universal benefits like healthcare, public transportation, education, and public amenities would reduce income needs and enrich leisure time.
Is the assumption that in the US humans will only ever do the same or less work than what’s being done now?
If not, answers to questions of what work needs to be done, and whether the financing, governance and distribution of benefits of the work should be private, public, cooperative, unionized, etc. would have a big impact on issues like what the work week should be, the impact of automation, or the scope of the need for a job or income guarantee.
“Is the assumption that in the US humans will only ever do the same or less work than what’s being done now?”
No. The assumption is that workers are concerned NOT ONLY with how much they earn but also with how much they have to do to earn it. The “huge amount of work undone” theory ignores the PROPORTION between amount of work and amount of pay for that work.
I don’t have or know of a theory. I was just using the phrase as a description of the many ordinary work outputs that would meet many ordinary practical needs. If everyone working now got the same pay for a shorter work week, and more people got jobs to make up the difference, that would be good, but it wouldn’t change that description or the amount of work getting done.
It all depends on what work is getting done to do what for whom. If all the unemployed are put to work making gold carriages and gold toilets for Donald Trump’s family and building MOABs and the planes to drop them from, then the work that needs to be done, won’t get done and the price of subsistence goods will go up.
We can talk in abstract terms about work that needs to be done til we’re blue in the face but it won’t mean anything unless we specify who gets what, who does what and what is the relationship between doing and getting.
I think that’s what I said at the beginning. First we need to say what needs to be done. My list was ordinary stuff that would benefit ordinary people – I doubt most people would say they generally don’t want things like that. Then we need to say how it’s funded and how the benefits are distributed.
Without that, how can we say robots are going to take all the jobs, or assess the potential scope of a job or income guarantee for those who still can’t find work, or decide whether a shorter work week is something nice for people with sufficient sustenance to enjoy it, or something critical because they can’t find child care and need a few hours to plant vegetables to keep from starving.
Thanks for your replies. I’m in over my head now, but appreciate the discussion.
. . . If everyone working now got the same pay for a shorter work week, and more people got jobs to make up the difference, that would be good, but it wouldn’t change that description or the amount of work getting done.
Labor expense per unit of output goes up. That’s a big no – no from capital’s point of view, and since capital pays for labor, and owns the means of production, capital rules.
Tied into “Why we can’t have a shorter work week” from a practical perspective is the massive debt load foisted on the public. From an NC post last year by Dick Bezemer and Michael Hudson.
To analyze this dynamic, we must recognize that we live in “two economies.” The “real” economy is where goods and services are produced and transacted, tangible capital formation occurs, labor is hired, and productivity is boosted. Most productive income consists of wages and profits. The rentier network of financial and property claims — “Economy #2” — is where interest and economic rent are extracted. Unfortunately, this distinction is blurred in official statistics. The NIPA conflate “rental income” with “earnings,” as if all gains are “earned.” Nothing seems to be unearned or extractive. The “rent” category of revenue — the focus of two centuries of classical political economy — has disappeared into an Orwellian memory hole.
The fiction is that all debt is required for investment in the economy’s means of production. But banks monetize debt, and attach it to the economy’s means of production and anticipated future income streams. In other words, banks do not produce goods, services, and wealth, but claims on goods, services, and wealth — i.e., Soddy’s “virtual wealth.” In the process, bank credit bids up the price of such claims and privileges because these assets are worth however much banks are willing to lend against it.
Hard to make payments when work hours are reduced, so those in big debt can’t get out of the rat race.
Wow! and all I thought direct labor in the manufacture of a product was <10% and had not been an issue since the sixties. Everything else involved in the much larger cost is either Overhead or Materials. Who would have thought Labor was such a show-stopper?
Direct labor is not a useful measure. Most products have very high labor content.
Remember that products are made from parts and materials, which in turn are made from other parts and materials. At each step in the process labor is embedded in the price of the parts.
Indirect labor is still labor – without designing and selling, there are no products.
So all in all, products are mostly labor.
I think you are exactly on point here. There is work that is being left undone that has a huge impact on people’s quality of life, both as recipients and deliverers.
What’s lost in the econ-talk-think-speak that consumes discussion about issues like this it that we actually have most of the actual tangibles resources we need to provide the jobs and services, mainly human labor.
What we don’t have is cash money, which if I remember from econ 101 is not actually a store of value, but merely an abstraction to facilitate trade. So print some dollars and keep spending them in distressed areas via grants or government spending until everything is running smoothly.
We need to stop talking about the Fed, inflation and the market and all these abstract economic indicators like they have any actual meaning or value. Normal folk can see with their eyes that there is work that is being left undone and that is a truer economic indicator than anything I’ve ever heard Kai Ryssdal talk about on the radio.
Issue: Why You Can’t Have a Shorter Workweek
A: Because that would require your employer(s) to actually share some of the last half-century’s worker productivity gains with you.
Yes. Same idea, shorter version.
Another excellent post censored in MSM propaganda orthodoxy.
But unfortunately from comments I read too many otherwise intelligent people have already embedded in their minds and adopted as obvious or natural straight lies and concocted by oligarchy hypotheses or conjectures about capitalist reproduction cycle and the labor and commodity market itself.
Quick look at Marx Capital vol 1 tells us the fallacy of even discussing length of workday as having any economic impact on production value as all pseudo economists argued before Marx who repudiated this notion completely, IWW understood or already in 1905.
No. Length of workday or work week has no impact on economic result of the company whatsoever as Marx proven at U.K. parliamentary hearing debunking rediculous last hour profit theory dominated at that time in economic circles forcing workers to work16 hour a day,7 days a week.
The same line of rationale later allowed Marx to prove that hiring wife’s of workers for half the rate or children for a quarter of man’s rate also does not translate into profit at all.
Too long to explain but do yourselves favor and read reread Marx capital with Engels footnotes it is there simply and clearly.
When I was in university studying math, I remember studying for exams, revising exercises and thinking to myself:” Wow… I was a genius that day! How did I do that? I actually did that? Wow!!!” I know that my brain power varies by the day and by the time of day.
The reality is that in many instances, the number of hours do not determine efficiency or productivity but there are many people out there whose self importance depends on their controlling other people’s lives.
The largely resolutely unproductive constantly berating the mostly potentially productive for never being productive enough.
It must be hard work moving goalposts for a living.
The 4 day work week is invariably mocked as loony extremism whenever it comes up these days, but I struggle to see any of the arguments presented against it that couldn’t also have been applied to the 40 hour work week when it was introduced. The fact that it was once presented as inevitable shows how far the Overton window has moved in the wrong direction since then.
Those same arguments were applied to the 40-hour week, to the 8-hour day, and before that to the 10-hour day.
In broad terms, the left abandoned working-class prosperity goals in favor of identity politics and narrow social justice gains. Great, we can have feminism, multiculturalism and gay marriage as we work our lives away.
Yes, we need a culture cleanse as Michael said so well. Wish I knew how to start it and some possible paths. Ecologically and emotionally essential, much more than nonsense like solar and wind powering our current culture.
I don’t want to overemphasize the world of Leave It To Beaver, but Nixon was talking about a 32 hour work week for men supporting families on one paycheck. So in a way, a 32 hour work week now would be a 64 hour work week.
As I’m reading this, I’m reminded of William Catton’s Overshoot, with one if its key messages being that there’s just far too much human (economic) activity, with the lifestyle of homo colossus imperiling our future. Dennis Bushnell talks about how “the whole ecosystem is collapsing” and that “we’ve been far too succesful as the human animal”. One could go on and on, and this has all been known for decades of course, yet nothing happens. As Richard Smith writes:
We’re all on board the TGV of ravenous and ever-growing plunder and pollution. As our locomotive races toward the cliff of ecological collapse, the only thoughts on the minds of our CEOs, capitalist economists, politicians and most labor leaders is how to stoke the locomotive to get us there faster. Corporations aren’t necessarily evil. They just can’t help themselves. They’re doing what they’re supposed to do for the benefit of their owners. But this means that, so long as the global economy is based on capitalism and private property and corporate property and competitive production for market, we’re doomed to a collective social suicide – and no amount of tinkering with the market can brake the drive to global ecological collapse. We can’t shop our way to sustainability, because the problems we face cannot be solved by individual choices in the marketplace. They require collective democratic control over the economy to prioritize the needs of society and the environment. And they require local, reigional, national and international economic planning to reorganize the economy and redeploy labor and resources to these ends. I conclude, therefore, that if humanity is to save itself, we have no choice but to overthrow capitalism and replace it with a democratically planned eco-socialist economy.
Despite all this good work, we still must face a sobering fact. If every company on the planet were to adopt the best environmental practices of the “leading” companies – say, the Body Shop, Patagonia or 3M – the world would still be moving toward sure degradation and collapse. … Quite simply, our business practices are destroying life on earth. Given current corporate practices, not one wildlife preserve, wilderness or indigenous culture will survive the global market economy. We know that every natural system on the planet is disintegrating. The land, water, air and sea have been functionally transformed from life-supporting systems into repositories for waste. There is no polite way to say that business is destroying the world.
Green Capitalism: The God That Failed – http://www.truth-out.org/news/item/21060-green-capitalism-the-god-that-failed
In his paper The Problem of Denial, Catton wrote how denial was used as a defense against “intolerable anomalous information” that contradicts “deeply entrenched cultural expectation of endless material progress. Furthermore, surviving “the clash between technosphere and ecosphere” would demand “that our current political, social, economic, and moral order be stood on its head. – http://www.zo.utexas.edu/courses/THOC/Denial.source.html
Some additional links:
People and the planet – The Royal Society Science Policy Centre report 01/12 – https://royalsociety.org/~/media/Royal_Society_Content/policy/projects/people-planet/2012-04-25-PeoplePlanet.pdf:
The concept of a steady-state economy is to take a different path to achieve sustainable, healthy, and equitable lifestyles for citizens. This alternative to continued economic growth is a non-growing or steady state economy (Daly 1991; Meadows et al.1972).
The circular economy is a move away from linear “take, make, dispose” industrial processes and the
lifestyles based on them (Stahel 1981). The concept of an economy in loops (or circular economy) was
based on the desire to create jobs, improve economic competitiveness, save resources and reduce waste prevention.
Any such developments cause great nervousness in developed economies, because of the dependence of full employment on constant growth. Rising unemployment is a quick route both to human misery and to loss of office for politicians. As the people of the Least Developed Countries come out of poverty they will of course become affected by the same pressures, and the growth of a huge globalised labour pool is a challenge for the coming century. A vital part of the changes envisaged must be to plan for jobs that do not require much material consumption. A more radical solution would be to adopt a model in which people do not work so hard once their primary needs are amply satisfied. This report is not the place to pursue these highly contested strands, but they cannot be ignored.
Clive Menzies – https://stuartjeannebramhall.com/tag/growth/:
Most of Menzies’s talk focuses on the urgent need to abolish our current debt-based (bank-controlled) monetary system. For five main reasons:
It drives systemic inequality by allowing those with more money than they need to exploit those who need money.
It drives unsustainable, exponential debt growth because the interest cost rises faster than society can create wealth to pay it.
It discounts the future, driving environmental destruction – it makes a forest worth more as sawed timber than as an ecosystem preserved for future generations.
It demands exponential GDP growth, rapidly depleting finite resources – 3% GDP growth means the economy doubles every 24 years which means extracting resources at twice the rate and throwing twice as much away.
It drives inflation.
He also demolishes the prevailing myth that a person’s existence on this planet is only justified by paid work. In a way it’s deliberate falsehood more than a myth. There is only enough “productive” work for 50% of the adult population and the vast majority of income in contemporary society is generated via “rent-seeking” (i.e. charging interest or rent or extracting and exploiting publicly owned natural resources).
Menzies lays out a monetary reform proposal that would abolish interest exploitation by the private banks who currently issue and control global currencies. Instead it would empower governments to issue interest-free sovereign currency.
This is about the taking the commodification of labour ie treating it increasingly in terms of it being a resource like any other, to its natural conclusion.
Widgets, microchips or sheets of steel don’t need educating, healing or even entertaining to keep them off the streets, and surpluses can be avoided or managed, whereas the same cannot be said quite so easily of the potentially problematic, uncooperative or restive labour force that’s got too big for its boots.
Cultivating a greater sense of insecurity, guilt and low self-worth by insisting that by not producing enough to warrant your place in society, implying or manufacturing a constant labour surplus or by propagating the idea that somebody else, possibly from somewhere else, is more deserving of your place, is more socially ‘useful’ and less of a burden has become the unspoken iniquitous mantra of our political and financial masters and who are, in a bitter ironic twist, largely the epitome of ‘unproductivity’ themselves.
There is something fundamentally wrong with evaluating anyone’s value on the basis of “productivity” or “efficiency”.
What about creativity? Well-being? Social cohesion? Environmental impact? Vibrancy of exchange? Fairness?
We’ve been brainwashed to focus our discourse in a way that values financial outputs above others.
I’d offer a different perspective on that. The problem isn’t productivity or efficiency. Rather, the problem is people in positions of power who don’t value the things you list – and comfortable intellectuals making excuses for them rather than calling them out about it.
The concepts of productivity and efficiency absolutely include the specific areas of concern you outline. It’s hard to think of something more fundamental to productivity than creativity or a bigger issue in efficiency than environmental impacts (seriously, the quintessential example when discussing externalities, for example, is pollution). That people with an agenda misuse the concepts is a statement about their desired policy goals, not about the underlying concepts.
If there were perhaps tens or hundreds of thousands of smaller business units: partnerships, LLCs sole proprietors, then perhaps the length of the workweek might change. Perhaps even the share of created wealth that the working and professional classes retain might increase. Even a change in how full employment and monetary policy are perceived as a public good instead of private loss.
It sounds utopian but it is as possible as this economic distopia we have created. We favor the large over the small. We see in every direction the repercussions of this Western economic philosophy of favoring large business at every level. It has to stop. We need to nurture a plenary of economic actors rather than a few lumbering behemoths.
We are investing too much power into the hands of too few and are reaping the rewards of it.
94% of jobs created under Obama were part time.
The shorter working week is here.
It just doesn’t pay a living wage.
Which is another reason why there needs to be a shorter STANDARD work week. The game is called divide and conquer. Analysis is a lot more useful than anecdote on this issue.
Neoclassical economics is a rigged economics.
“Classical and neo-classical economics, as dominant today, has used the deductive methodology: Untested axioms and unrealistic assumptions are the basis for the formulation of theoretical dream worlds that are used to present particular ‘results’. As discussed in Werner (2005), this methodology is particularly suited to deriving and justifying preconceived ideas and conclusions, through a process of working backwards from the desired ‘conclusions’, to establish the kind of model that can deliver them, and then formulating the kind of framework that could justify this model by choosing suitable assumptions and ‘axioms’. In other words, the deductive methodology is uniquely suited for manipulation by being based on axioms and assumptions that can be picked at will in order to obtain pre-determined desired outcomes and justify favoured policy recommendations. It can be said that the deductive methodology is useful for producing arguments that may give a scientific appearance, but are merely presenting a pre-determined opinion.”
Michael Hudson is of the same opinion.
It was designed to hide the distinction between “earned” and “unearned” income and the once separate areas of “capital” and “land” are conflated, the idle rentiers are now productive members of society.
But they aren’t and over a 100 years later a 21st Nobel Prize winning economist re-discovers the problem masked at the end of the 19th Century and known to Classical Economists.
“Income inequality is not killing capitalism in the United States, but rent-seekers like the banking and the health-care sectors just might” Angus Deaton
You can hide the problem in economics but it still exists.
Say’s Law “Supply creates its own demand”
They need that to keep wages low and maximise profits.
You can hide the problem in economics but it still exists.
Larry Summers and the IMF are both seeing the problems in demand (from low wages).
“But that was yesterday’s problem, Summers said. The economy now faces secular stagnation, or a chronic lack of demand.”
The IMF are talking about problems with global aggregate demand.
Economics can use Say’s Law, but if it isn’t true the problems will manifest themselves as they have.